Oct 25, 2011|
Garland is in The Think Tank with Author of "Retirement Heist" and former Wall Street Journal Investigative Reporter Ellen Schultz to discuss U.S. employers destroying workers' pensions and retirement programs.
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Automatically Generated Transcript (may not be 100% accurate)
This hour and talk about something good I stumbled on but I -- fascinating. Brenda -- working for -- local publication. He has retirement benefits that are in loaded and it's been frozen the pension benefits. So I start take a look control of their troops out of curiosity. And our brand across soon article called retirement high next. Booked and those cool school in America whose pensions. And is written by Ellen Schultz would be on Wall Street Journal and I think Caroline has joined us now Helen I appreciate it scrolling your. I've I've read your article in the and I didn't researcher on the side. And I was stunned I'm I'm looking. Right now it's something called pension ripples from it's apathetic voter dot com. And they're talking about exactly what -- talking about in San Diego Orange County. New York. New Jersey Pennsylvania. Florida. Illinois Texas and goes on and on and and then I had an article where they're doing the same thing in Europe. Just tell you what's going on. Yes it might -- -- place I talk about how the large companies which we've -- been creeping pensions and cutting retiree benefits. Actually caused the crisis themselves -- actions that they kept it. Only it. Ten years ago there was a quarter trillion surplus assets in pension plans. And over the years company has withdrawn money embarrassed when the papers. Financial. Refinancing aren't even executive compensation. And retiree health benefits. So what combination of many these practices to -- what I meant that when the stock market went down. Okay does and then there was there were crucial months and a lot of the plant became underfunded. It's -- failed and people lost pushing their pensions. I've also found that when companies are cutting the benefits they were boosting the benefits for the top executives. So now it won't have a large companies like Apache and IBM they -- their top executives yet in the billions of dollars collectively. Now this this kind of takes on the believe often stated. That the use these companies can no longer. Afford to provide food. The play and benefit pensions run. And so they're -- saying that they say it damaged the plant itself is its self inflicted another scapegoating the retiree. There's point 84 million people in these plants are about evenly split -- retired and active people. And companies that. Held under the plan the frozen minimum. Because the plants actually can help the company's bottom line still in many ways to generate profits for the. Companies can often exaggerated He is the liability account for retiree health care. Which is called what it's doing in the public sector and they can't get in order to. I have an excuse to cut benefits and -- also do accounting rules enable them to Q&A profit for the planned an accountant and the. One of the sentences in your report called me on the percentage of fortune one foundation come to his. Where they at least one eat frozen defined benefit clone program -- Drupal and over the list seven years. It didn't that I can't increase the amount of -- land so what you're finding out any company it is that. The only growing pension obligation won't it for the executive. An executive went one to effect certain. -- -- Other than the other thing that I find it and thought -- -- the company does our finances executive pensions which shocked many people. One of the things they did was save -- money from the regular pension plan. It hey Pete executive pension concourse level and the other is that they don't like -- full color worker. It. Seemed. Clear to you yeah to. -- Well with the spotlight it's whirlpool -- I think the -- -- an informal pension fund. The executive and then of course -- know who believe god who they actually played for the retirees. The company collecting money they get to death benefits tax free and introduced at the financing vehicles Ford executives. Well more when we come back wanna get a couple definitions -- receive that. Defined benefit -- or moral value than private accounts more Morgan definition of exactly what are defined benefit is and I and were asking about the year of the life insurance in the you know pension plans being used to. Finance the pension. Plans in the golden parachutes for executives when asked if that's legal Poland or you who love each still the news editor of health and science. Well children. -- well I want. For many years in the Investigative Group and I'm no contributor to the Paper. So that explains. You don't pretend that. Explain to me a couple of things did find. Benefit pensions. You say in Europe report -- form more valuable than private accounts it exactly what is defined benefit pension. Defined benefit pension is it just the typical couple tests and attention. Google but we're really worked with if you work for a company. Take it from their pain at all religious person. Our current conditions. So. Companies do though is slated truncated because they -- -- it -- grows overtime. And then when you reach retirement. You either pay you would certainly every month they hated all up in a long term. And I think that's a little bit count because -- accounts like 41 -- Do you think that you find yourself with the money look at your paycheck. Sometimes your employer contributes to my attention to -- -- the separate plant it's this money that you actually. And the company can't put their hands on. Different from the pensions were to compete. Central Atlantic and -- handled situations for companies have been trying to hang on to the money they can try it out people. I'll eat Indian Leo article that Broderbund I've written about true book somebody who's in Britain and preparing. So that these pensions or redo done. To finance restructuring plans Goosen bonuses. Perform performance based management compensation. Funding lavish pensions for top executives. It is interact. -- -- I can grab the money and run with that. What they do which restructuring the template people really get rid of being an older workers it will obviously -- an excellent. Cool and -- which is complete without. Elena I tell you what we're we're having a bad break up on your telephone futile mind. I'll let you sang it very quickly and we'll try to cornerbacks who for get a -- -- Okay where credit gets right back on the air choose when she comes back I'll ask her about. She is also training on her player in the book not to stone corporate manager -- But on the retirement industry apparently there. Consultant firms and -- prone to come in Intel you -- exactly how old to use these pennant pension benefits. -- or legal. But -- everybody's pensions -- brisk. They UCL a -- to pay actuaries. Those are the people that tell the C Euro and the leader of the company's how much they can afford to do certain things. But -- the warriors. To the financial managers. That you trust units in itself. Ellen you back with me. Good good we can hear your whole lot better now thank you Chris and you're explaining bill -- you run out in the end in literally grabbed the engines to pay you for executive compensation in the etc. How'd they do. The very tricky and complex what apple did. They seek to. Boom and the to use the regular pension plan. Everybody you know that gets trapped breaks -- -- -- trigger removed apparently fit into the pool they're able to being -- that the effect. On me. Elena I appreciate your calling and -- the that sound component so bad. Brave we're gonna have computer be short but I would love to have you back a later date we can better get a better -- and I appreciate your time very much we're gonna continue. Talking about -- broken the ramifications. Thereof I'm sort about the you know Babylon but thank you call. Aren't -- let me -- -- we're gonna do what she's talking about. Throughout the ninety's to planned looked healthy because stock market was rising. In that made surpluses. In the pensions. So the company who's been -- out in music. As she says in the book. Restructuring plans in mergers. -- bonuses. Performance based management compensation. Funding lavish pensions by top executives. They've been used they've been terrible lives to fund retiree health benefits. Which also we have truck. Street got all these different entities pulling all in pension funds. Now here's another. Article that I've been around long these loans were success. Government employees who retire to when you're with full benefits then the going to get another job. And after three to five years they polio and another. Pension benefit. And the governments. Are not. Funding the pensions. While handing out huge increases. And that's article points out something that I I don't think anybody can deny him someday. Someone who's going to have to call open an enormous amount of money. Even on the books. And won't be the current politicians. Who face up to the fiscal banditry. At this point they will be long gone. Kinda like search purity -- -- the other day pattern article. -- would Evert cup businessmen and your your afternoon suit or you'll Wear. Then the cost. Of the pension funds for government workers. And the military. Or just a little short. I'll do their lack of funding. Or the deficit for Social Security. To almost said bigots. I think -- like five point seven trillion dollars. In Social Security. We've got this thing funded -- 2030 -- And even a 2035 would not -- they can still okay. 75 parts in the benefits. And if you don't populist 55 years and younger. Decide to accept the changes. Being recommended by some -- -- Social Security be good to go to almost the turn of the century. But tensions. For military. And federal employee is such an entirely different matter. It's up on Google now we're looking to pensions. In the government. And in a number. Large number of private companies. Where. You Islam being stolen personally is being used for all of -- were purposes but. As the stock market went up. And they borrowed from then it goes down in there's less sudden the money is still low. So you get a situation where this article says something someone. Gonna have to cough up an enormous amount of money and even up the books. The owner of accompanied let's say you bits that faced with a loudly monthly sales. And you can't make payroll and -- Peeking in not. Elect not to make the deposits. And hope He can make it up later -- Not intentionally doing anything wrong. But He gets himself and Obama and and we see you overseeing. In -- many of these category. And legislators and administrative -- his State's human same thing except on a much grander scale. Instead of depositing the money in the bank -- -- they use the money. To base in the year calendar year perished in state -- And it is illegal to ensure that in all branches of the government but keep in -- and this sets. Didn't won't -- you the current politicians. Are held to responsibility. For something it's legal. Because today will be long -- Interest -- topic it by I was. Two major blemish of -- of programs depletion and Atlanta pension fund of the Fed's. I think I'd go check on. When we come back. We'll talk to run that was true professor of political science. A GOP presidential candidates are against pulling out of what they say it's a mistake. We'll see if you agree or disagree this is good thing tech Garland Robin who would do and this is governor --